Some Stats

The $20 billion drop in monthly retail sales is far more severe than recent recessions (since 1980). Resultant layoffs feed the negative cycle, making the economy unresponsive to stimulus attempts.



Job losses are the core of the problem. Contracting incomes translate into declining consumer spending, but the heightened uncertainty affects all consumers, prompting them to pay off debt and increase savings — and magnify the fall in consumer spending and employment. Official unemployment is close to 9.0 percent, and likely to get worse before it improves. But unemployment figures understate the magnitude of the problem because they exclude those not actively seeking work. If we look at actual job losses, the contraction in employment is the highest in 50 years, far exceeding the troughs of 1975 and 1982.






Consumer confidence as measured by the Conference Board is at an all-time low since the start of the series in 1997. Consumer sentiment is approaching its 1980 low of 50. This illustrates how deeply the financial crisis has shaken consumer faith in the economy and how difficult it will be to regain that trust. Unfortunately this unleashes a self-reinforcing cycle, with low confidence levels leading to increased savings and debt reduction — which in turn leads to lower consumer spending and further job losses.



Source: www.incrediblecharts.com